Future outlook enhanced by Google Trends

The impact of the economic shutdown to control the spread of COVID-19 continues to dominate the Commonwealth Bank Household Spending Intentions (HSI) series. Data to the end of April 2020 shows large declines were experienced in Home Buying, Travel and Entertainment spending intentions. April Retail Spending Intentions shifted lower, closer to the levels seen in February 2020, after a spike higher in March. Health and Fitness spending intentions remained at elevated levels in April – with a sharp rise in bicycle and fitness equipment. Education spending intentions were down modestly, while Motor Vehicle spending intentions have begun to roll-over.

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Spending intentions snapshot

New perspectives can keep you one step ahead  

Whether you are running a business, a policy maker, an investor or one of Australia’s corporate enterprises - insights on shifting consumer spending intentions are critical in planning for the future. Our Household Spending Intentions series combines our spending data, one of Australia’s largest financial data sources, with Google Trends publically available search activity. By connecting actual spending data to intentional data, our analysis provides an early indication of prospective spending trends across seven key sectors.  This series covers about 55% of the total household spend. Future releases will look to expand our coverage to the  remaining spending components.

Data-driven insights can give your organisation a new perspective and help you keep a step ahead.

Home Buying Spending Intentions

Home buying spending intentions

  • After holding near record high levels in March, Home Buying intentions declined in April as the economic shutdown restrictions dramatically effected home buying activity
  • The RBA’s substantial monetary policy easing has seen mortgage interest rates fall to multi-generational lows and this would (under normal circumstances) be expected to support buying intentions
  • Into May, however, we have seen a recovery in auction clearance rates that suggest some more home buying activity ahead. In addition, the ability to have more people at open houses and auctions will help. The sharp rise in unemployment and the hit to confidence will likely continue to drag on the housing sector

Retail Spending Intentions

Retail spending intentions

  • After spiking higher in March, April Retail spending intentions declined back to the levels seen in February
  • In March food, alcohol and goods spending jumped sharply higher as the COVID-19 restrictions saw a significant lift in spending activity. By April much of this retail spending activity had returned to more ‘normal’ levels

Motor Vehicles Spending Intentions

Motor vehicle spending intentions

  • The HSI readings for Motor Vehicles showed a distinct turn up in spending intentions from late in 2019 – which then extended into early 2020
  • This improvement was related to the ‘wealth-effect’ from the gains in the housing market and house prices
  • However, this improvement is now reversing as the COVID-19 shutdown makes shopping for a new car or commercial vehicle challenging

Entertainment Spending Intentions

Entertainment spending intentions

  • As with the Travel HSI, the COVID-19 shutdown and the ‘stay at home’ requirements saw the Entertainment HSI decline further in April
  • The April Entertainment HSI reading is the lowest in the history of the HSI – and also required some rescaling of the axis
  • Most entertainment venues will remain closed in the Step 1 re-opening plans, with up to 20 patrons expected to be allowed in venues in Step 2. It is not until Step 3 that venues will be allowed to have up to 100 people inside entertainment venues

Travel Spending Intentions

Travel spending intentions

  • Travel spending intentions collapsed in April as the COVID-19 shutdown and travel restrictions took hold
  • The April Travel HSI readings are the lowest, by a large margin, since the series began (and required a large change to our chart axis)
  • Travel spending intentions will continue to be impacted by government mandated restrictions. The Step 1 re-opening of the economy will include the ability to undertake some local and regional travel for recreation, although each state is following slightly different paths. This should help support travel spending intentions in the months ahead. International travel will likely remain off the agenda for 2020

Education Spending Intentions

Education spending intentions

  • Education spending intentions declined again in April, with the ‘stay at home’ directives, reduced face-to-face learning and international travel restrictions all impacting on the sector
  • While there were falls in spending at universities, colleges and schools, there was an increase in spending intentions for both correspondence learning and trade and vocational study
  • The re-opening of schools, per state guidelines, and increased face-to-face learning at universities and technical colleges in the Step 1 economic plans should help education spending in coming months

Health and Fitness Spending Intentions

Health and fitness spending intentions

  • Health and Fitness spending intentions remained near record highs in April
  • Despite some declines in spending on sectors such as professional sports and clubs, health and fitness spending intentions are being supported by spending on nursing and personal care and, especially, bicycle shops and fitness equipment – implying that efforts to try and stay fit and healthy during the shutdown period are a positive
  • This should further improve with the Step 1 re-opening plans allowing for up to 10 people in outdoor gyms/training

Enhanced by Google Trends

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